3. Steve Randy Waldmann reminds us that unit labor costs have been falling, not rising, in most rich countries, including almost all European countries, and in particular have been converging across Europe (as basic theory would predict). This weakens the argument of those who claim that high union-driven labor costs are the cause of Europe's woes. It also provides support for the notion of factor price equalization - the thesis that the stagnation in rich-world incomes is due to the massive China Labor Dumb of 2000-present.

5. The Incidental Economist reminds us of an important fact from first-year microeconomics: Although the First Welfare Theorem says that (under certain conditions) free markets are efficient, the Second Welfare Theorem says that (under only slightly more restrictive conditions), redistribution is efficient too! So before you use the Welfare Theorems as a justification for free markets, remember that. (H/T Thoma).

On (5) - that's not an important fact. The Arrow-Debreu model describes no possible economy and one should refuse to draw any practical political conclusions from the first and second welfare theorems.